Audit (A-04-12-04019)

01-14-2013
The Republic of Namibia, Ministry of Health and Social Services, Did Not Always Manage the President's Emergency Plan for AIDS Relief Funds or Meet Program Goals in Accordance With Award Requirements

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Complete Report

Summary

Through its Global HIV/AIDS Program, CDC implemented the President's Emergency Plan for AIDS Relief (PEPFAR), working with ministries of health and other in-country partners to combat HIV/AIDS by strengthening health systems and building sustainable HIV/AIDS programs in more than 75 countries. Through a 5-year cooperative agreement, CDC awarded PEPFAR funds totaling $20.6 million to the Republic of Namibia, Ministry of Health and Social Services (the Ministry) for the budget period September 30, 2009, through September 29, 2010.

Our audit found that the Ministry did not always manage PEPFAR funds or meet program goals in accordance with award requirements. With respect to financial management, specifically financial transaction testing, we found that $3.7 million of the $4 million reviewed was allowable, but $243,000 was not. Additionally, the Ministry used PEPFAR funds to pay $565,000 of potentially unallowable value-added taxes (VAT) on purchases, did not accurately report PEPFAR expenditures for this cooperative agreement on its financial status report (FSR) submitted to CDC, and did not obtain an annual financial audit as required by Federal regulations.

Our program management review showed that 12 of the 30 accomplishments sampled from the annual progress report were not related to the goals and objectives of the cooperative agreement. Seven accomplishments were not supported by documentation and six were only partially supported. Also, the Ministry did not submit its annual progress report to CDC within the allotted time frame in accordance with Federal regulations.

The Ministry's policies and procedures did not ensure that it (1) maintained adequate supporting documentation for allowable expenditures under the cooperative agreement and accurately reported costs on its FSR, (2) submitted its progress report timely and included only items related to the agreement that it could fully support, and (3) obtained an annual financial audit and submitted the report as required by Federal regulations.

We recommended that the Ministry (1) refund to CDC $243,000 of unallowable expenditures, (2) work with CDC to resolve whether the $565,000 of VAT was an allowable expenditure under the cooperative agreement, (3) file an amended FSR for the budget period of the cooperative agreement that we reviewed, (4) develop and implement policies and procedures for reconciling the FSR to the accounting records prior to submission and ensuring that it maintains adequate supporting documentation for expenditures of Federal funds, (5) use the exchange rate in effect at the time it prepares the FSR, (6) develop and implement policies and procedures for creating an annual progress report that has goals and objectives related to the cooperative agreement and submitting the report in a timely manner, and (7) have an annual audit performed and submit it in a timely manner to the applicable United States Agency. The Ministry generally concurred with our recommendations, describing efforts it had taken, or plans to take, to address our recommendations.